Johnson Controls, Hitachi and Hitachi Appliances have signed a nonbinding memorandum of understanding for a transaction in which Johnson Controls will obtain a 60% ownership stake in Hitachi Appliances’ global air-conditioning business, excluding sales and service operations in Japan and certain other assets.
The companies said in a statement on Wednesday that they expected the joint venture (JV) to begin operations in 2014, subject to final due diligence and board approvals, definitive agreement on terms, required regulatory approvals and other customary conditions.
Building on the leadership of both companies, the partnership would include key products such as variable refrigerant flow and inverter technologies supporting both the commercial and residential markets. The JV would combine Johnson Controls’ global reach with Hitachi’s technology expertise.
“Technology leadership derived from its ongoing investments in research and development have established Hitachi as a key contributor to the global heating, ventilation, and air-conditioning industry,” said Johnson Controls president and CEO Alex Molinaroli.
“The addition of these capabilities adds key technologies to our product portfolio. Combined with our existing $15-billion building technologies and services business, this investment positions Johnson Controls as the world’s largest commercial air-conditioning provider.”
The proposed JV comes at a time when the worldwide air-conditioning market is rapidly changing. Customers are increasingly demanding air-conditioning options with better energy efficiency in response to an increase in energy-saving and environment protection regulations.
“Both companies have a long and proud history of innovation and growth in the industry with similar values and cultures,” said Hitachi president Hiroaki Nakanishi.
“As the worldwide air-conditioning business environment continues to evolve, we believe Johnson Controls and Hitachi’s partnership can supply integrated solutions to fulfil the needs of customers worldwide.
“This is great news for our customers, which will benefit from the full range of solutions, equipment and service that Johnson Controls and Hitachi can offer them on a global scale,” said Molinaroli.
Nakanishi also said: "Alongside this JV, we look forward to exploring further opportunities to collaborate with Johnson Controls and Hitachi's broad building solution business, capitalising on information technology-related technologies.”